Smokey and the Bandit in Cyberspace: The Dormant Commerce Clause, the Twenty-First Amendment, and State Regulation of Internet Alcohol Sales

Article excerpt

Recently, some federal judges have given oenophiles everywhere reason to rejoice by striking down, under the dormant Commerce Clause doctrine, venerable state laws that limit the import and sale of alcoholic beverages to customers directly. (1) Such laws had presented a considerable obstacle to the sale of alcohol, wines in particular, over the Internet. (2) For the most part, only parents concerned about sales to minors and in-state liquor distributors have voiced concern. Many commentators approve of federal court application of the dormant Commerce Clause doctrine--the long-standing guarantee that parochial barriers will not be allowed to inhibit the free-flow of goods throughout our national market--to invalidate these laws. (3)

But one might ask, glancing at a copy of the Constitution, what of the Twenty-first Amendment? (4) Section Two of that amendment, after all, reads: "The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited." (5) The plain text of that section suggests that these recent court decisions are mistaken. (6) Yet the courts tell us that the Twenty-first Amendment is not to be read literally or invoked as a shield for protectionist legislation. Only laws designed to promote "temperance," they say, are protected by the Amendment from dormant Commerce Clause scrutiny. (7)

Where did the district courts get the idea for this distinction-between "good" alcohol legislation, which furthers the state's legitimate "core" interest in temperance, and is protected under the Twenty-first Amendment, and "bad" legislation motivated by simple economic protectionism and thus constitutionally impermissible? Certainly not from the text of the Amendment, whose wording makes no such distinction. Not from the Framers of the Twenty-first Amendment, whom the recent court decisions barely discuss. (8) Not from Congress, which recently opened the federal courts to state attorneys general to enforce state legislation against out-of-state alcohol shippers. (9) Rather, it is the Supreme Court, in a series of decisions beginning over thirty years ago, that has constrained the operation of the Amendment to such a degree that it has become an "'almost' forgotten clause of the Constitution." (10) Yet, shortly after the Amendment's ratification, when the Court was first called upon to interpret it, no less a gray eminence than Mr. Justice Brandeis turned aside a number of challenges to allegedly protectionist state liquor legislation, arguing that to make the distinctions made by recent lower courts, would be to effect not a "construction" of the Amendment, but a "rewriting" of it." (11)

To put it plainly, recent lower court decisions have indulged in broad applications of the Supreme Court's own narrow interpretations of the Twenty-first Amendment--fashioned in cases whose facts went beyond the explicit text of the Amendment--American and have erroneously concluded that those decisions dictate the invalidation of state liquor importation laws. That courts continue to construe narrowly--nearly to the vanishing point--a specific reservation of state power at federalism's high tide of judicial enforceability, seems particularly worthy of attention. The growing market for interstate shipment of alcohol, and the near unanimity of federal courts in their continued assertions of the Twenty-first Amendment's irrelevance, makes this an appropriate time for a reexamination of the Amendment and the Supreme Court's interpretation of it.

In this essay, I will do three things. First, I will summarize the history of the framing and ratification of the Twenty-first Amendment. Its purposes were well understood to go beyond merely allowing states to pursue temperance policies. At the time, the question was understood to be whether the states or the federal government would control the liquor trade. …